OnDemand WTP Pricing Research

The Psychology of Competitive Pricing for Ecommerce | Business2Community

Pricing for ecommerce is a tricky beast. You need to account for competition with other sellers, but you don’t want to de-value your products in a race-to-the-bottom. Purely competitive pricing can lead to disappointing results: you might not sell enough to compensate for offering the lowest prices.

A profitable pricing strategy involves considering not only your competitions’ prices, but also your customers’ motivations. Sellers use their understanding of potential buyers’ decision-making processes to create pricing that encourages purchases.

Different types of companies have been experimenting with psychological pricing for years, but it’s important to understand how it applies in ecommerce where competition among online sellers is rampant. When sellers set prices in a way that motivates buyers to purchase, without devaluing their products, they are able to win more sales than competitors.

To help sellers gain this competitive edge, we’ll take a look at the most effective psychological pricing principles and tactics, organized by four categories:

Sellers who employ these psychological pricing strategies can maintain their brand’s reputation and target their ideal buyers without engaging in race-to-the-bottom pricing.

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The Psychology of Competitive Pricing for Ecommerce.

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